Lyon v. DePuy Orthopaedics, Inc. et al

Filing 28

ORDER GRANTING #11 Motion to Stay Proceedings Pending Multidistrict Litigation Transfer Determination and VACATING #16 Motion to Remand by Judge Phyllis J. Hamilton(pjhlc2S, COURT STAFF) (Filed on 10/7/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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DEBORAH LYON,

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Case No. 19-cv-05270-PJH

Plaintiff,

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v.

DEPUY ORTHOPAEDICS, INC., et al.,

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United States District Court
Northern District of California

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Defendants.

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ORDER GRANTING MOTION TO
STAY PROCEEDINGS PENDING
MULTIDISTRICT LITIGATION
TRANSFER DETERMINATION AND
VACATING MOTION TO REMAND
Re: Dkt. Nos. 11, 16

Before the court is defendants Depuy Orthopaedics, Inc., Johnson & Johnson

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Services, Inc., Johnson & Johnson, Depuy International Limited, and Depuy Products,

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Inc., (collectively, the “Removing Defendants”) motion to stay all proceedings in this

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action pending a determination by the Judicial Panel for Multidistrict Litigation (“JMPL”)

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on whether to transfer this action to MDL No. 2244: In re DePuy Orthopaedics, Inc.,

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Pinnacle Hip Implant Products Liability Litigation (the “MDL No. 2244 proceeding”). The

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matter is fully briefed and suitable for decision without oral argument. Accordingly, the

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hearing set for October 9, 2019 is VACATED. Having read the parties’ papers and

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carefully considered their arguments and the relevant legal authority, and good cause

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appearing, the court hereby GRANTS the Removing Defendants’ motion for the reasons

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summarized below. Consequently, the court also VACATES the October 30, 2019

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hearing on plaintiff Deborah Lyon’s motion to remand. Plaintiff may re-notice that motion

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if the JPML refuses to transfer this action to the MDL No. 2244 proceeding.

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BACKGROUND
Plaintiff initiated this action in the San Francisco County Superior Court on July 8,
2019. Dkt. 1-2 (“Compl.”). In her complaint, plaintiff alleges claims in connection with

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two hip transplants she received in 2010 and 2011 that used the ceramic-on-metal

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Pinnacle Hip System device (“Pinnacle Device”). Such claims include strict liability for

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design and manufacturing defects in the Pinnacle Device, strict liability for failure to warn

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of hazardous defects in the Pinnacle Device, negligence, negligent misrepresentation,

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breach of express warranty, and breach of implied warranty. Id. ¶¶ 104-161. Plaintiff

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alleges all seven of the above claims against all defendants named in the underlying

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action. Id. Aside from the Removing Defendants, the complaint also names independent

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contractor and device sales representative, Kale Turner. Id. ¶ 16. Defendant Turner is

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the only California resident in this action, id. ¶¶ 3-15, and the only allegation of his
specific conduct is that he “marketed and sold” the Pinnacle Device “either directly or

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United States District Court
Northern District of California

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indirectly, to customers throughout the state of California, including Plaintiff,” id. ¶ 16.

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On August 22, 2019, the Removing Defendants removed plaintiffs’ action to this

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court. Dkt. 1. In support of their removal, the Removing Defendants assert that diversity

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federal subject matter jurisdiction is proper because defendant Turner was fraudulently

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joined. Id. ¶¶ 14-48.

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On September 4, 2019, the Removing Defendants filed this motion, requesting to

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stay all proceedings pending a determination by the JPML to transfer this action to the

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MDL No. 2244 proceeding assigned to the Hon. Judge James E. Kinkeade of the United

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States District Court for the Northern District of Texas. Dkt. 11. The JPML created that

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proceeding on May 23, 2011, MDL Dkt. 120, and did so to coordinate all federal cases

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sharing “factual questions as to whether DePuy’s Pinnacle Acetabular Cup System, a

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device used in hip replacement surgery, was defectively designed and/or manufactured,

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and whether defendants failed to provide adequate warnings concerning the device.” In

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re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prods. Liab. Litig., 787 F.Supp.2d

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1358, 1369 (J.P.M.L. 2011).

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On August 29, 2019, the JPML issued Conditional Transfer Order (“CTO”) No.

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323. The CTO identified the instant action as a potential “tag-along” to the MDL No. 2244

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proceeding and conditionally transferred it to that proceeding. MDL Dkt. 2183. Shortly
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after, on September 5, 2019, plaintiff filed her notice of opposition to such transfer. MDL

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Dkt. 2185. The JPML has not issued its final order on the transferability of this action to

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the MDL No. 2244 proceeding.
On September 19, 2019, plaintiff filed her motion to remand. Dkt. 16. In it, plaintiff

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disputes the Removing Defendants’ assertion that California resident defendant Turner

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was fraudulently joined. Id. As a result, plaintiff argues, this action is not subject to

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removal on the basis of diversity subject matter jurisdiction. Id.
DISCUSSION

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Title 28 U.S.C. § 1407 confers the JPML with the authority to transfer “civil actions

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involving one or more common questions of fact [which] are pending in different districts .

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United States District Court
Northern District of California

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. . to any district for coordinated or consolidated pretrial proceedings.” 28 U.S.C. §

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1407(a). Section 1407 further provides that the panel must order such a transfer when it

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determines that doing so would advance “the convenience of parties and witnesses” and

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“promote the just and efficient conduct of such actions.” Id. The panel may issue a CTO

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pending its determination of an action’s transferability, but such orders “do[] not affect or

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suspend orders and pretrial proceedings in any pending federal district court action and

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does not limit the pretrial jurisdiction of that court.” J.P.M.L.R. 2.1(d).
When considering a motion to stay pending a JPML transfer, courts evaluate the

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following factors: (1) potential prejudice to the non-moving party if the stay were granted;

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(2) hardship and inequity to the moving party if the action were not stayed; and (3) the

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judicial resources that would be saved by avoiding duplicative litigation if the cases were

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consolidated. Jones v. Bristol-Myers Squibb Co., 2013 WL 3388659, at *2 (N.D. Cal. July

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8, 2013). Courts in this district also recognize that, when faced with a motion to remand,

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“deference to the MDL court” for resolution of that motion often provides “the opportunity

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for the uniformity, consistency, and predictability in litigation that underlies the MDL

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system.” Freitas v. McKesson Corp., 2012 WL 161211, at *1 (N.D. Cal. Jan. 10, 2012).

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A.

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Judicial Efficiency Supports Granting the Stay
“Preservation of judicial resources is a primary factor to consider in evaluating a
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motion to stay proceedings pending a transfer to an MDL court.” Jones, 2013 WL

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3388659 at *2. “Courts generally grant a stay pending resolution of consolidated

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proceedings when a stay would avoid the needless duplication of work and the possibility

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of inconsistent rulings.” Freitas v. McKesson Corp., 2012 WL 161211, at *2 (N.D. Cal.

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Jan. 10, 2012).

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Here, the court finds that granting the stay would advance judicial economy. The

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JPML has already ordered this action conditionally transferred to the MDL No. 2244

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proceeding. The MDL court has adjudicated Pinnacle Device-related products liability

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claims since May 2011 and has previously adjudicated motions to remand involving
fraudulent joinder in connection with such claims. See Danning v. DePuy, Inc., 2014 WL

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United States District Court
Northern District of California

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12573846, at *1 (C.D. Cal. Apr. 9, 2014) (“Defendants DePuy Orthopaedics, Inc. . . .

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move to stay this action (which concerns, at least in part, a Pinnacle Acetabular Cup

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System used in hip replacement surgery) pending the likely transfer of it to a pending

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multi-district litigation (‘MDL’) . . . Plaintiffs, meanwhile, move to remand, arguing lack of

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complete diversity—the defendants removed by discounting the presence of non-diverse

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defendants under a fraudulent joinder theory . . . The Court has, on multiple occasions,

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denied similar remand motions or requests involving the alleged fraudulent joinder of one

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or more of the same non-diverse defendants . . . [collecting cases] . . . As a result, the

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Court GRANTS the Moving Defendants’ motion to stay . . .”) (internal citations omitted).

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Additionally, as explained by the court in Danning v. DePuy, Inc., the MDL No. 2244

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proceeding “ha[s] established a centralized procedure for adjudicating remand motions.”

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Id. Given that the MDL court either has existing procedures to adjudicate or has already

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adjudicated motions to remand implicating fraudulent joinder issues, that court is best

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situated to adjudicate plaintiff’s motion to remand in a way that would avoid inconsistent

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results among like cases. Additionally, the MDL court likely maintains the greatest

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institutional knowledge concerning Pinnacle Device-related litigation. As a result, the

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MDL court would likely be the most efficient forum to decide plaintiff’s motion to remand.

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Given the above, the court finds that granting the requested stay—and thereby allowing
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the MDL court the opportunity to adjudicate plaintiff’s motion to remand (as well as any

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other pretrial motions that could arise during the period of the requested stay)—would

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best maximize judicial efficiency.

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B.

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Fairness Considerations Support Granting the Stay
For the reasons discussed immediately below, the court finds that fairness

considerations also favor granting the requested stay.

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1. The Removing Defendants Would Suffer Prejudice If the Stay Were Denied

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Courts in this district recognize that the potential burden of engaging in duplicative

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litigation weighs heavily in favor of issuing a stay pending a multidistrict litigation transfer

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determination. Jones, 2013 WL 3388659 at *3.

United States District Court
Northern District of California

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Here, the Removing Defendants would suffer hardship if their motion to stay were

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denied. As this court reasoned in Jones, if the court were to deny the motion to stay and

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then consider and deny the plaintiff’s competing motion to remand, and the case were

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then transferred, “the MDL court could revisit the issue, thus forcing [defendant] to

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relitigate it.” Id. On the other hand, if the court subsequently granted that competing

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motion to remand and the MDL court “later decides that removal in similar cases was

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proper,” defendant “would be prejudiced by having to litigate the case in state court

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instead of before the MDL.” Id. Stated differently, if the court were to deny the motion to

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stay, the Removing Defendants “would be left with two unfavorable alternatives that

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expose it to a significant risk of duplicative litigation and prejudice.” Id. As a result, the

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potential prejudice to the Removing Defendants favors granting the stay.

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2. Plaintiff Would Not Suffer Any Prejudice If the Stay Were Granted

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Here, plaintiff has failed to identify any cognizable prejudice to her that would

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result from a delay in litigating this action for the finite period requested. It is also unlikely

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that plaintiff could identify such prejudice. On the one hand, if the JPML refuses to order

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the transfer, plaintiff may promptly re-notice her motion to remand before this court. On

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the other, if the JPML orders the transfer, plaintiff may raise her remand motion with the

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MDL court. In either scenario, plaintiff has already briefed the majority of her motion, so
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the marginal resources she would need to expend to renew it are limited.
Lastly, because the JPML has already conditionally transferred this matter to the

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MDL No. 2244 proceeding and plaintiff opposed that order on September 5, 2019, the

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duration of the requested stay will likely end soon. Jones, 2013 WL 3388659 at *4 (“The

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JPML has already conditionally transferred this matter to the Plavix® MDL and a stay is

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not likely to be long in duration.”). Given the above, the court finds that the absence of

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any potential cognizable prejudice to plaintiff favors granting the stay.

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C.

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Plaintiff’s Concurrent Motion to Remand Does Not Change the Stay Decision
Despite a challenge to its subject matter jurisdiction in a concurrent motion to

remand, a court in this district retains its authority to stay an action pending the JPML’s

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United States District Court
Northern District of California

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transfer determination. Gonzalez v. Organon USA, 2013 WL 664551, at *1 (N.D. Cal.

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Feb. 22, 2013) (“Contrary to what plaintiffs suggest, there is no rule that the district court

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must first consider the jurisdictional issues raised in a motion to remand, and there is

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nothing to preclude the MDL court from considering the jurisdictional issues after the

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transfer.”); Gonzalez v. Ford Motor Co., 2017 WL 9614465, at *2 (N.D. Cal. Nov. 16,

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2017) (summarily rejecting plaintiff’s “main argument [] that there is no basis for federal

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jurisdiction in this case” when ordering a stay pending the JPML’s transfer determination);

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Brewer v. DePuy Orthopaedics, Inc., 2012 WL 1595083, at *2 (N.D. Cal. May 4, 2012)

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(denying plaintiffs’ motion to remand and granting defendants’ motion to stay despite

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argument by plaintiffs that federal removal was improper). Still, a court in this district may

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preliminarily scrutinize the jurisdictional issues presented in a competing motion to

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remand pursuant to a three-step inquiry set forth by the court in Meyers v. Bayer AG, 143

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F. Supp.2d 1044 (E.D. Wisc. 2001). See Jones, 2013 WL 3388659, at *4 (“Courts first

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give preliminary scrutiny to the merits of the motion to remand and then proceed to

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evaluate jurisdictional issues. . . . If this evaluation suggests that the jurisdictional issue is

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both difficult and similar or identical to those in cases transferred or likely to be

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transferred, the court should stay the action.”). Such preliminary scrutiny, however, is

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optional in the Ninth Circuit. Ernyes-Kofler v. Sanofi S.A., 2017 WL 813506, at *2 (N.D.
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Cal. Mar. 2, 2017) (“The Meyers test, although not binding in the Ninth Circuit, also favors

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a stay.”); Ford Motor Co., 2017 WL 9614465, at *2 (same).

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As explained above, this court need not engage in a preliminary scrutiny of
plaintiff’s motion to remand in the first instance. However, even if it were to apply the

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Meyers framework here, a stay would still be appropriate. It appears defendant Turner’s

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purportedly fraudulent joinder raises complex jurisdictional issues. In her complaint,

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plaintiff provides only a single allegation of conduct by defendant Turner specifically.

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With respect to plaintiff’s allegations of conduct by defendants generally, various such

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allegations are refuted by defendant Turner’s declaration in support of the Removing

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Defendants’ notice of removal. Dkt. 1-1. Moreover, defendant Turner’s purportedly

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United States District Court
Northern District of California

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fraudulent joinder suggests issues similar to those presented in other cases previously

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transferred to the MDL No. 2244 proceeding. Brewer, 2012 WL 1595083, at *1 (“This

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case has been conditionally transferred to Multidistrict Litigation (‘MDL’) No. 2244, In re:

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DePuy Orthopaedics, Inc., Pinnacle Hip Implant Products Liability Litigation. Defendants

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have filed a motion to stay pending transfer, and Plaintiffs have filed a motion to remand

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based on what they contend is the non-fraudulent joinder of Defendant Thomas

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Schmalzried . . . Dr. Schmalzried is a defendant in numerous cases that have been

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transferred or are pending transfer to the MDL court, including cases brought by plaintiffs

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from the same states as Plaintiffs in this case.”). As a result, even if the court were to

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apply the optional three-step Myers framework, it, too, would favor a stay.
CONCLUSION

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The court GRANTS the Removing Defendants’ motion to stay all proceedings in

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this action pending the JPML’s determination on whether to transfer this action to the

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MDL No. 2244 proceeding. As a result, the court VACATES this motion’s hearing as well

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as the hearing on plaintiff’s motion to remand scheduled for October 30, 2019. If the

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JPML refuses to transfer this action, plaintiff may re-notice her motion to remand for

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hearing.

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IT IS SO ORDERED.
Dated: October 7, 2019
/s/ Phyllis J. Hamilton
PHYLLIS J. HAMILTON
United States District Judge

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United States District Court
Northern District of California

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